Clariant pays cost of restructuring programme

Clariant hopes to put some colour back into its bottom line (Clariant)

Swiss specialty chemicals company Clariant of Basel has recorded a net income of SFr131 million ($106.2 million) for 2006 from its ongoing operations.

This content was published on February 20, 2007 - 08:53

But because of the firm's deep restructuring programme, it posted a loss of SFr78 million when all operations - current and discontinued - are taken into account.

Clariant saw sales rise for the year to SFr8.1 billion, with 7 per cent growth in Swiss francs. Overall, selling prices remained stable.

"We achieved robust top-line growth with stable pricing in 2006," said Clariant chief executive Jan Secher in a statement. "Profitability increased, but we see considerable room for improvement."

Net income from ongoing operations was slashed in half, falling from SFr262 million to SFr131 million, mainly impacted by a goodwill charge of SFr100 million in its leather business.

If discontinued operations are included, Clariant went from a net profit in 2005 (SFr192 million) to a net loss of SFr78 million last year.

High costs

The company said it had faced high costs for raw materials and energy, as well as increased competition from Asia.

It has also struggled since acquiring British chemicals group BTP for SFr3.2 billion six years ago.

The group has been forced to slash costs, restructuring since 2004. Late last year it announced yet another round of job cuts - ten per cent of its workforce - and a reduction of its product range by a quarter.

Clariant, which makes pigments for products from textiles to cars, posted a net loss for the third quarter of 2006 because of one-off charges, although sales and operating profit beat expectations thanks to strong demand.

Rival Ciba Specialty Chemicals said last week it would slash its workforce by 16 per cent as it attempted to save up SFr500 million by 2009. It posted a SFr42 million loss for 2006.

swissinfo with agencies

Key facts

Sales: SFr8.1 billion
Gross profit: SFr2.486 billion
Operating income: SFr385 million
Net income from ongoing operations: SFr131 million
Net loss from discontinued operations: SFr 209 million
Cash flow: SFr284 million

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In brief

Basel-based Clariant is a global leader in the field of fine and specialty chemicals.

It produces dyes, pigments, functional chemicals, additives and masterbatches for the textile, paper, leather, plastics, synthetic fibres and paint industries.

The company has a strong heritage going back to the 1850s, with roots in both Sandoz and Hoechst Specialty Chemicals.

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